A Revised Cyclical Positioning

John Robertson

PortfolioDirect

A weakening macro landscape points to a lengthier cyclical adjustment for raw material markets than previously anticipated before prices stabilise and begin to improve. The latest PortfolioDirect investment report (VIEW LINK) outlines a changed view of the resource sector cyclical positioning. Until mid 2014, the process of adjustment had been broadly consistent with historical patterns leading to some expectation that sector markets would become progressively more attractive toward the latter part of 2014 and the earlier months of 2015. A clear demarcation in conditions, timed around July 2014, is now evident with an upward shift in the US dollar being a key influence. PortfolioDirect has taken this as the beginning of a fresh cycle with the accompanying need for a rejuvenated adjustment process. This conclusion implies a potentially lengthy delay before market balances can return to their mid 2014 positioning. In the adjacent “Duration of Metal Price Cycles” illustration, this post-2014 cycle is shown in cyan (with the 2011-2014 cycle depicted in red).


John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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